Mastercard Inc’s quarterly profit beat analyst estimates on Thursday, as lower costs softened the blow from fewer people using the payment processor’s cards during the coronavirus pandemic.
The outbreak has hit large parts of the global travel and retail industries as stores remain shut and shoppers stay at home to avoid catching the illness.
Travel bans around the world have taken a toll on payment processors. Mastercard reported a 45% drop in cross-border volume on a local currency basis in the quarter.
Gross dollar volume – the dollar value of transactions processed – fell 10% to $1.4 trillion.
The decline in cross-border volume has continued since the quarter ended, even as the number of transactions increased within the United States.
In the third week of July, the value of cross-border volume was down 40% from a year earlier, according to a presentation for investors. U.S. transactions were up 5% while transactions outside of the United States were down 3%.
Chief Financial Officer Sachin Mehra told analysts that since June cross-border business has “improved modestly” and will get better as travel restrictions are relaxed.
Net income fell about 31% to $1.42 billion in the second quarter ended June 30. Excluding items, profit was $1.36 per share, beating estimates for $1.16, according to IBES data from Refinitiv.
Mastercard’s shares rose 1.41% in premarket trading on the announcement but were down 1.3% with the market in mid-morning trading.
Total operating expenses fell 5% to $1.6 billion in the quarter.
Rival Visa Inc’s results also topped analysts’ estimates on Tuesday as lower-than-expected expenses eased the drag of lower spending due to the coronavirus pandemic.
The U.S. government reported earlier this month that retail sales rebounded in May and June from a sharp drop in April, and ended down 8% for the quarter from a year earlier.
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